Digital TV: Leaving viewers in limbo — Fortune

Congress has mandated the switch from analog TV in February of 2009. Basically, to say the range of frequencies devices communicate with one another is crowded is a laughable understatement. The switch from analog will free up the decades-old frequency range used for OTA (over-the-air or “rabbit ear”) transmissions. The good news is those frequencies can be used by police, fire, and rescue to better communicate or facilitate new innovations. The bad news is that analog transmissions of television will be switched off (no tweaking the rabbit ears will help).

But for consumers with one of those 70 million sets — many of whom are likely to be poor, elderly or uneducated, being forcibly switched from one technology to another will be a nightmare.

To be sure, the transition will facilitate a lot of progress for both the tech industry and the public sector.

Once TV stations switch to digital transmission, they will return to the government a big chunk of the radio spectrum they currently use to transmit their analog channels.

Some of that spectrum will go to first responders — police, fire and public safety officials — so they can better communicate with one another. Breakdowns in emergency communication slowed the response to the September 11 terrorist attacks and Hurricane Katrina. New spectrum should help.

The rest of the spectrum will be auctioned off to the highest bidders — probably tech companies. The sale of this valuable, scarce real estate is expected to bring in about $10 billion, maybe more. That will help reduce the federal budget deficit.

Better yet, when the spectrum is sold off, the companies that buy it will use it to develop new technology and services. Cheap, ubiquitous wireless broadband access is one possibility. Mobile TV or music services are others.

Scheduled for 2008, the auction will be the biggest spectrum sale since a 1994-95 spectrum auction. That sale helped boost the mobile phone industry, boosting the number of cell phone subscribers in the U.S. from 24 million to 200 million. It also helped drive down the cost of wireless minutes from an average of 47 cents a minute to 9 cents a minute, according to analysis from financial services firm Stifel Nicolaus.

Additionally, broadcasters were specifically given the digital spectrum in 1996 for the return of the analog spectrum. Now, ten years later, we still don’t have the analog spectrum back.

I understand that some people are still using rabbit ears out there; at least, that’s what I’m told. My grandfather has satellite TV in a city where they still don’t have cable.

Obviously, three years is enough time for anyone (read: ANYONE) to save up for a new T.V. Unfortunately, this is Congress, which means politics, which means people are going to vote for the person who doesn’t switch off their rabbit ear television.

To avoid a consumer revolt, Congress has set aside about $1.5 billion to smooth the transition. Owners of outmoded TV sets will be eligible for two vouchers, worth $40 each, to help buy converter boxes that will enable today’s analog TV sets to receive digital signals.

I hear the screeching of 535 fat little piggies.

The nightmare scenario is that people who depend on free, over-the-air TV for news and entertainment will lose their access, or have to pay more for it, so that the rest of us can get faster service on our Blackberries and ESPN on our cell phones.

In other words, the government should buy everyone a new T.V.